Have you thought about streamlining the cumbersome process of budgeting and reporting on Capital Projects in SAP, even though you are not using the fixed assets module? There is an easy way to do this in the system and may offer one of the best ROI’s of any SAP investment you make. If you are like many other companies you are currently maintaining your Capital Projects in a legacy system or using excel spreadsheets. What is the benefit of having SAP when you can’t integrate and automate the budgeting and reporting process for these projects? In about two months time you can implement a fully automated AUC solution.
For starters you must choose between Internal Orders and Project Systems (PS). Our preferred choice is PS. Let me explain to you why. The PS system has a reputation of being expensive to implement and difficult to maintain and for large and complex projects there is some truth to this. However, for basic Capital Projects, the AUC process is an ideal way to get the business working with and thinking about PS. The advantage of PS over Internal Orders is that the WBS are automatically assigned to a project which offers more robust reporting features and budgeting. There is no need to manually maintain the reporting groups as is
required with Internal Orders either.
Now that you’ve decided that PS is the way to go for your company, let me explain to you how this works. You need to do a basic setup of assets in the system to enable the AUC process. Once you have setup the requirement in fixed assets you can then establish your top level PS project and setup each underlying WBS. One WBS will equal one Capital Project and one AUC. Through the automatic settlement features of PS you can track your costs to a WBS level and run a monthly settlement job to a corresponding AUC in fixed assets. When you are ready to go live with your capital project you must simply close out the AUC in assets and do a final, automated, settlement of the AUC to the asset account on the GL. From there you revert to your current process of setting up the new asset in your legacy system, where you will also continue to run your depreciation.
The benefits of implementing this solution are that you can now manage your capital budget and the execution of that budget in SAP. You can automatically code the WBS at the time you enter a purchase order / invoice and the WBS posting will be automatically updated during normal GR/IR processing. The budget and actual information of each project is now stored in your SAP system forever. The detailed drill down reporting that SAP provides is available so you no longer need to search for it in SAP to support the lines items in your Excel spreadsheet. When you are ready to implement assets in SAP your AUC process will already be in place. No more messy compilations using exce
l spreadsheets or waiting until month end for reporting on capital spend. Lastly, with the top down / bottom up reporting features in PS you can now quickly see how you are executing across your total capital budgets. A feature your financial executive’s will really like.
Contact : Johanleroux@msn.com